10-K: Neuronetics Reports Strong Revenue Growth Amidst CEO Transition

Neuronetics, Inc. announced significant revenue growth for 2025, driven by the Greenbrook acquisition, alongside a new CEO appointment and ongoing efforts to improve profitability.

Summary

• Total revenues increased by 99% to $149.2 million for the year ended December 31, 2025, up from $74.9 million in 2024.
• U.S. revenues grew by 101% to $146.0 million in 2025, compared to $72.5 million in 2024.
• Net loss improved by 11%, decreasing to $39.1 million in 2025 from $43.7 million in 2024.
• Net cash used in operating activities improved to $20.4 million in 2025, down from $31.0 million in 2024.
• The Greenbrook TMS Inc. acquisition, completed on December 9, 2024, significantly contributed to clinic revenue, which represented 59% of U.S. revenues in 2025, compared to 6% in 2024.
• Daniel L. Reuvers has been appointed as the new President and Chief Executive Officer, effective March 23, 2026, succeeding Keith J. Sullivan who will retire on March 31, 2026.
• The company completed a secondary public offering in February 2025, raising $19.0 million net proceeds, and utilized an At-The-Market (ATM) program to raise an additional $7.8 million net proceeds in 2025.
• Credit facility covenants with Perceptive Credit Holdings IV, LP were amended on March 12, 2026, including a $5.0 million principal payment and adjustments to revenue and liquidity requirements.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed but strategically important period. While significant revenue growth and improved operating cash flow are positive, the decline in gross margin and ongoing net losses, coupled with legal investigations and integration challenges, present notable headwinds. The new CEO appointment and continued R&D efforts offer future potential.

Positives

• Total revenues increased by 99% to $149.2 million in 2025, demonstrating strong top-line growth.
• U.S. revenues saw a substantial 101% increase to $146.0 million, primarily driven by the Greenbrook acquisition.
• Net loss improved by 11%, reducing to $39.1 million in 2025 from $43.7 million in 2024.
• Net cash used in operating activities decreased to $20.4 million, indicating improved operational cash management.
• The Greenbrook acquisition has diversified the business model, integrating medical device sales with clinic services.
• The NeuroStar Advanced Therapy System is a market leader in TMS therapy, supported by extensive clinical data and broad insurance coverage (95% of U.S. payor covered lives).
• Successful capital raises through a secondary public offering ($19.0 million net) and an ATM program ($7.8 million net in 2025) have strengthened liquidity.
• Amendments to the Perceptive Credit Facility, including a $5.0 million principal payment and adjusted covenants, provide greater financial flexibility.

Negatives

• Gross margin decreased significantly to 48.5% in 2025 from 72.3% in 2024, primarily due to the inclusion of Greenbrook's lower-margin clinic business.
• The company continues to incur net losses ($39.1 million in 2025) and has an accumulated deficit of $458.8 million.
• U.S. NeuroStar Advanced Therapy System revenue decreased by 7% to $14.3 million, with fewer units sold (159 units in 2025 vs. 185 units in 2024).
• U.S. treatment session revenue decreased by 15% to $43.3 million, partly due to the reclassification of Greenbrook sales post-acquisition.
• General and administrative expenses increased by 64% to $49.7 million, largely due to Greenbrook integration costs.
• Interest expense increased by 15% to $8.4 million due to a higher outstanding debt balance.
• A subsidiary received a Civil Investigative Demand from the U.S. Attorney's Office for the Middle District of Florida and is subject to a similar investigation by the Michigan Attorney General's office regarding federal healthcare program billing practices (pre-acquisition Greenbrook).
• CMS audits have designated approximately $1.3 million in reimbursements as potentially subject to recoupment.
• Greenbrook's in-sourced revenue cycle management function experienced difficulties collecting patient responsibility payments.
• The owner of Greenbrook's largest supported physician groups intends to transition out of the relationship by October 1, 2026, posing a potential disruption.
• The company is considering dropping its CE Mark for NeuroStar due to cost and lack of EU sales, which could impact international marketing authorizations.
• Patents for some of the company's core technology began to expire in the United States in 2024.

Risks

• Inability to achieve or sustain profitability due to a history of net losses and anticipated ongoing operating losses.
• Reliance on the sale of NeuroStar Advanced Therapy System and treatment sessions to generate revenues, with potential negative impacts from unfavorable market reactions or perceived inadequate benefits.
• Disruptions to business and liquidity from global pandemics or epidemic diseases.
• Significant declines in insurance coverage or reimbursement from third-party payors, which could reduce revenues and cash flows at Treatment Centers.
• Dependence on patient satisfaction with the effectiveness of the NeuroStar Advanced Therapy System, with potential harm to reputation and sales if patients are not satisfied.
• Intense competition from other TMS therapy providers and pharmaceutical companies developing alternative treatments.
• Difficulties in effectively managing anticipated growth, which could strain organizational, administrative, and operational infrastructure.
• Reliance on single-source suppliers for some components and a single manufacturer for system assembly, posing risks of supply chain interruptions.
• Risks associated with international business operations, including managing third-party distributors and compliance with foreign regulations.
• Potential for employee, consultant, distributor, or partner misconduct or non-compliance with regulatory standards and healthcare fraud and abuse laws.
• Reliance on third parties to conduct clinical trials, which could lead to delays in obtaining regulatory approval for additional indications.
• Exposure to product liability claims inherent in the testing, manufacture, sale, and use of medical devices.
• Inadequate insurance coverage for all categories of business risk, potentially leading to significant uninsured liabilities.
• Risk of warranty claims on products, with potential for increased claims in the future.
• Negative impact from violations of applicable anti-corruption laws or internal ethical business policies.
• Adverse effects on business from significant disruptions in information technology systems or cybersecurity breaches.
• Performance issues, service interruptions, or price increases by shipping carriers.
• Exposure to employment litigation and unfavorable publicity.
• Fluctuations in the effective tax rate and potential tax obligations in excess of accrued amounts.
• Vulnerability of operations to interruption or loss due to natural or other disasters, power loss, or strikes.
• Failure to successfully manage acquisitions, investments, licenses, or other strategic alliances, or to integrate them with existing business.
• Adverse effects on reported financial results from changes in accounting principles.
• Meaningful variability in sales and gross profit among fiscal quarters due to seasonal factors and other influences.
• Integration difficulties and failure to realize anticipated benefits and synergies from the Greenbrook acquisition.
• Significant demands placed on managerial, operational, and financial personnel and systems due to the Greenbrook integration.
• Failure to meet Nasdaq continued listing requirements, such as the Minimum Bid Price Requirement, potentially leading to delisting.
• Failure to timely or accurately bill for services, including difficulties processing claims and collecting patient responsibility payments, which could negatively impact revenue and cash flow.
• Subject to fines, penalties, and other sanctions for non-compliance with laws governing the business, including ongoing government audits and investigations.
• Risks associated with leasing Treatment Center locations, including potential late payments and inability to extend or renew leases.
• Ability to obtain SPRAVATO from suppliers on a timely basis at competitive costs, and capital intensity of the Buy & Bill model.
• Increased costs if third-party payors impose additional requirements related to the provision of services at Treatment Centers.
• Adverse effects on financial results if Treatment Centers lose clinicians or due to a shortage of qualified mental healthcare providers.
• Reduced demand for services or significant costs to incorporate new technology due to technological change or novel drug treatments for MDD.
• Adverse effects from tariffs implemented by the presidential administration.
• Exposure to federal, state, and foreign fraud and abuse laws, health information privacy and security laws, and transparency laws, including ongoing investigations by the U.S. Attorney's Office and Michigan Attorney General.
• Impact of healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare system.
• Risks related to corporate practice of medicine laws and fee-splitting prohibitions in various states.
• Disruption to Greenbrook's ability to provide services if the owner of its largest supported physician groups transitions out of the relationship.
• Loss of SPRAVATO inventory due to damage or expiration.
• Failure to obtain and enforce patent protection for technologies, products, or product candidates, including the expiration of core technology patents.
• Inability to effectively protect the confidentiality of trade secrets.
• Inability to enforce intellectual property rights throughout the world due to varying legal protections.
• Third parties asserting ownership or commercial rights to inventions developed by the company.
• Claims that employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
• Diminished value of patents due to changes in U.S. patent law.
• Loss of patent protection for non-compliance with procedural, document submission, or fee payment requirements.
• Failure to comply with obligations under license or technology agreements with third parties.
• Unsuccessful collaboration arrangements with third parties.
• Inadequate protection of trademarks and trade names.
• Need to raise additional capital, which could result in dilution to existing stockholders or restrictive debt terms.
• Restrictions on operating and financial flexibility imposed by the credit facility, and potential for default.
• Limitations on the ability to use net operating losses to offset future taxable income due to Section 382 of the Internal Revenue Code.
• Volatility in the trading price of common stock.
• Potential decline in stock price due to future sales of common stock or securities convertible into common stock.
• Concentration of ownership of common stock by Madryn Asset Management, LP, which may exert substantial influence and whose interests may conflict with other stockholders.
• Provisions in charter documents or Delaware law that could delay or prevent an acquisition.
• Exclusive forum provisions in charter documents that could limit stockholders' ability to obtain a favorable judicial forum.
• No anticipation of paying cash dividends on common stock in the foreseeable future.
• Exposure to securities litigation.
• Potential for increased costs and demands on management upon losing Smaller Reporting Company (SRC) status.
• Failure to maintain proper and effective internal controls over financial reporting.

Future Outlook

Management anticipates continued operating losses in the near term as the company invests in sales, marketing, and product development. Clinic revenue is expected to increase in 2026, while sales and marketing expenses are projected to decrease due to post-acquisition cost efficiencies. General and administrative expenses are expected to rise in 2026 due to the consolidated company's size and investments in systems. Research and development expenses are expected to remain consistent. The company believes its current cash and anticipated revenues are sufficient for the next 12 months but may seek additional capital in the future.

Management Comments

• Management believes that the company's cash and cash equivalents as of December 31, 2025, and anticipated revenues from sales of products and services are sufficient to fund operations for at least the next 12 months.

Industry Context

StockSavvy.ai notes that Neuronetics operates in the growing mental health sector, addressing Major Depressive Disorder (MDD), which is a leading cause of global disability with a significant economic burden. The market for Transcranial Magnetic Stimulation (TMS) therapy is still evolving, offering opportunities for growth despite competition from other TMS systems and pharmaceutical treatments. The company's vertical integration through the Greenbrook acquisition positions it to capitalize on the under-adoption of TMS and the shortage of mental healthcare providers in the U.S. However, the industry faces increasing governmental scrutiny over pricing and reimbursement, which could impact future profitability.

Comparison to Industry Standards

• NeuroStar Advanced Therapy System is supported by the largest clinical data set of any competing TMS system, including 31 peer-reviewed articles and 15 clinical studies with over 1,000 adult patients, which is a significant competitive advantage over competitors like Brainsway, Magstim, MagVenture, CloudTMS, and Nexstim.
• The company highlights that its NeuroStar system offers clinically demonstrated response and remission with durable results, a demonstrated safety profile with limited treatment-emergent side effects, and high patient adherence, differentiating it from competing TMS systems that may lack consistent treatment reproduction, significant clinical data, practice development resources, and cloud-based management systems.
• Psychiatrists using NeuroStar can generate approximately $9,000 of average revenue per commercially insured patient for a standard course of treatment, which is presented as a meaningful incremental income opportunity for practices, and providers can recoup their initial capital investment by treating approximately 12 patients.

Management Changes

Corporate Governance

Legal Proceedings

• On October 8, 2025, a subsidiary received a Civil Investigative Demand from the U.S. Attorney's Office for the Middle District of Florida, seeking information related to federal healthcare program billing practices (focused on periods prior to the Greenbrook acquisition).
• In October 2025, the Michigan Attorney General's office opened a similar investigation.
• The company is cooperating with both investigations and is engaged in ongoing constructive dialogue.
• CMS audits have designated approximately $1.3 million in reimbursements as potentially subject to recoupment.

Related Party Transactions

• Madryn Asset Management, LP and its affiliates own approximately 30% of the company's outstanding common stock and have the right to appoint two directors to the board.
• Prior to the Greenbrook acquisition, Madryn converted outstanding amounts under Greenbrook's credit agreement and interim funding into Greenbrook Shares, which were then exchanged for Neuronetics Shares.
• On March 2, 2026, the company paid Madryn $1.1 million from Employee Retention Credit (ERC) proceeds, related to a Term Loan and Exchange Agreement previously executed between Madryn and Greenbrook before the acquisition.
• Avinash Amin, M.D., a representative of Madryn, serves on the company's Board of Directors.

Stakeholder Impact

• Shareholders face potential dilution from future equity raises and stock price volatility, with Madryn's significant ownership potentially influencing corporate decisions. No cash dividends are anticipated in the foreseeable future.
• Employees will experience a leadership transition with the new CEO, Daniel L. Reuvers, and ongoing investments in R&D and sales/marketing, alongside potential impacts from cost synergies post-acquisition.
• Customers will continue to have access to NeuroStar and Greenbrook services, with new purchasing models being piloted, but may be affected by billing issues or potential clinician shortages.
• Patients benefit from expanded access to TMS and SPRAVATO therapies and ongoing R&D for new indications, but face inherent risks related to product effectiveness and potential adverse events.
• Creditors, particularly Perceptive Credit Holdings IV, LP, will continue to monitor the company's financial performance and compliance with amended debt covenants, following a $5.0 million principal payment.

Next Steps

• Daniel L. Reuvers is expected to commence employment as President and Chief Executive Officer on March 23, 2026.
• Keith J. Sullivan will retire as President and Chief Executive Officer on March 31, 2026.
• The company plans to optimize Greenbrook's operations by rolling out the Better Me Provider Program patient responsiveness standards to all 93 Treatment Centers and increasing the number of centers offering SPRAVATO.
• The company intends to continue optimizing its direct sales and customer support team to accelerate growth and increase utilization of NeuroStar Advanced Therapy Systems.
• Research and development efforts will continue to focus on enhancing the NeuroStar Advanced Therapy System and developing pipeline for additional neurohealth indications.
• The company will need to find a suitable replacement for the relationship with the owner of Greenbrook's largest supported physician groups by October 1, 2026.
• The company is evaluating the impact of new accounting standards (ASU 2024-03, ASU 2025-05, ASU 2025-06) on its financial statements.
• The company is assessing the long-term value proposition of maintaining patents outside the United States and may conclude that the cost and effort of maintaining its CE Mark are not justified.

Key Dates

Recommendation

The company shows strong revenue growth driven by a strategic acquisition and improved operational cash flow, indicating positive momentum in its core business and integration efforts. However, the significant decline in gross margin, ongoing net losses, and the presence of legal investigations introduce considerable uncertainty and risk. The new CEO appointment is a key development, but its impact is yet to be fully realized. While there are clear growth drivers, the existing financial challenges and regulatory scrutiny warrant a cautious approach, suggesting a 'Hold' position for investors to monitor the company's ability to execute its strategy, resolve legal matters, and improve profitability.

Keywords

Neuronetics, NeuroStar, TMS therapy, mental health, MDD, Greenbrook, SPRAVATO, medical device, clinic services, financial results, CEO change, capital raise, debt financing, SEC filing, 10-K, corporate governance, risk management, intellectual property, healthcare regulation